Indonesia's central bank held its key interest rate unchanged on Thursday after reducing it for two consecutive sessions, citing increased uncertainty in the global financial markets after the U.S. election.
The Board of Governors of Bank Indonesia, led by Governor Agus Martowardojo, left the 7-day repo rate at 4.75 percent, in line with economists' expectations.
The bank had trimmed the rate by a quarter-basis point in each of the previous two sessions.
"The policy is consistent with Bank Indonesia's prudence in response to increasingly uncertain global financial markets in the wake of the US election against a stable domestic macroeconomic backdrop, reflected by low inflation and a narrower current account deficit," the bank said in a statement.
The bank had adopted 7-day repo rate as its new benchmark rate in August. Before switching to the seven-day reverse repo rate, BI had slashed its then-benchmark reference rate, by cumulative 100 basis points between January and August.
Bank Indonesia also predicted more muted growth in the fourth quarter, in line with fiscal consolidation, at around 5 percent. The economy was projected to expand in the 5.0-5.4 percent range next year.
The bank also said that it will continue to stabilize exchange rates in line with the Rupiah's fundamental value while keep maintaining market mechanisms.
"The central bank's more cautious tone suggests that BI's easing cycle is nearing its end," Oliver Jones, an economist at Capital Economics, said.
"For the moment, we are sticking with our forecast for just one more rate cut next year, but the timing of any further rate cuts will depend on how quickly the US Fed moves to tighten policy."
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